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LONDON MARKET MIDDAY: FTSE 100 hits record pre-Fed decision this week
Stock prices in London were up heading into the afternoon on Monday, beating more cautious trade on mainland Europe, as investors shifted focus onto this week’s Federal Reserve interest rate decision in the US.
The FTSE 100 index rose 40.94 points, 0.5%, at 8,180.77. It had climbed to 8,189.14, its best-ever level.
‘The blue-chip index continues to glow and sustain energy that we haven’t seen in the UK market for a long time,’ AJ Bell analyst Russ Mould commented.
The FTSE 250 was up 87.10 points, 0.4%, at 19,911.26, and the AIM All-Share was up 4.13 points, 0.6%, at 759.41.
The Cboe UK 100 was up 0.5% at 817.20, the Cboe UK 250 added 0.4% to 17,200.19, and the Cboe Small Companies was up 0.1% at 15,681.74.
In European equities on Monday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was flat.
AJ Bell’s Mould added: ‘The FTSE 100’s year-to-date performance is now better than the Nasdaq 100 in the US, the S&P BSE 100 in India and the CSI 300 in China. So much for the FTSE’s reputation of being a home for boring, outdated companies.’
Among the star performers on London’s large-cap index on Monday, Frasers Group added 2.5% as the Sports Direct owner unveiled a £80.0 million share buyback. Asia-focused insurer Prudential rose 2.9% after a well-received update from life insurance and pensions company AIA Group in Hong Kong. Miner Anglo American added another 2.0% amid the growing conviction that it could receive another takeover bid.
Reuters reported BHP is mulling an improved bid for BHP. Citing a source, the news agency reported a sweetened offer could be made ‘in coming weeks’. BHP last week Thursday confirmed it had offered to buy Anglo American in an all-share deal valuing the mining group at £31.1 billion. Anglo American rejected the offer.
In New York, stocks are called to open higher. The Dow Jones Industrial Average is called up 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.3%.
The Federal Reserve announces an interest rate decision on Wednesday. It is expected to leave rates unmoved, but with recent inflation readings coming in hot, and words from policymakers hawkish, focus will be on what Chair Jerome Powell has to say.
Following the decision, focus then turns to the latest US jobs report on Friday.
ING analysts commented: ‘Our economics team expects a 210,000 payroll print versus 250,000 consensus. We think the dollar is more likely to lose some ground because of payrolls than because of the Fed if anything.’
The pound was quoted at $1.2532 early Monday afternoon, up markedly from $1.2453 at the time of the London equities close on Friday. The euro stood at $1.0716, climbing from $1.0676. Against the yen, the dollar was trading at JP¥155.89, down sharply from JP¥157.41 on Friday. However, it had risen to another multi-decade high of JP¥160.14 earlier Monday.
The ‘yen dumps before it jumps’, Bannockburn Global Forex analyst Marc Chandler summarised.
Chandler added: ‘The dollar soared to almost JP¥160.20 before falling sharply to JP¥154.55 and then rebounding to almost JP¥156.00. Intervention has not been confirmed and Bank of Japan data will not cover it until next month. On balance, it appears that most think it was algo-trading in thin markets given the Japanese holiday.’
Back in London, Hipgnosis Songs Fund rose 1.0%. It backed a $1.57 billion takeover offer from Blackstone, trumping a previous offer from Concord Chorus Ltd, as the pursuit for the music rights publisher took another twist.
New York-based investment manager Blackstone will pay $1.30 in cash for each share in Hipgnosis, around 104 pence.
It is a premium of 4.0% to Concord’s $1.51 billion offer, worth around 101p per Hipgnosis share. Concord had raised its bid from $1.40 billion last Wednesday, in a bid to thwart reported interest from Blackstone.
Hipgnosis said it no longer recommends that new Concord offer.
Elsewhere, Smarttech247 Group added 11%. The artificial intelligence-enhanced cybersecurity services provider said it has won a new three-year deal with an existing client in the pharmaceutical solutions space.
The deal, worth $2.1 million, will be for the provision of Smarttech247’s partnership offering with Splunk
Chief Executive Officer said: ‘We are thrilled to announce this most recent contract win with a pre-existing client, a large, pharmaceuticals solutions organisation. This milestone underscores the confidence in Smarttech247 and Splunk’s combined capabilities and our dedication to delivering leading cybersecurity solutions.’
Eagle Eye Solutions rose 4.5%, after the marketing software-as-a-service firm won a one-year contract with Tesco.
‘EagleAI Personalised Challenges is a digital platform which allows retailers to personalise promotions, providing customised challenges designed to reward incremental behaviour. In-built AI and deep machine learning facilitate hyper personalisation through its analytics capability, providing consumers with promotions more suited to them,’ it said.
‘Following a successful trial, with a higher than anticipated participation rate, Tesco will roll out personalised challenges to more Clubcard members in the coming months, under the name Clubcard Challenges. The solution will power personalised and gamified offers and promotions to each individual Clubcard member.’
Brent oil was quoted at $87.90 a barrel early Monday afternoon, down from $88.26 late Friday. Gold was quoted at $2,341.00 an ounce, up from the $2,333.37 it bought at the time of the London equities close Friday.
Still to come on Monday is a German inflation reading at 1300 BST.
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